Cofco Land in Hong Kong Reverse Takeover

A family walks by a bulletin board showing informations of affordable housing at a real estate office in Qingdao city, eastern China’s Shandong province, 12 September 2013.

European Pressphoto Agency

Hong Kong Parkview Group Ltd. is planning to issue shares to buy property assets in China from a unit of its parent, Cofco Corp., in a reverse takeover that will give its Chinese affiliate greater access to global capital markets.

Cofco Land, an unlisted unit of Cofco Corp., will sell its mixed-used complexes, commercial property and hotel projects in Beijing, Chengdu, Shanghai, Hong Kong, Suzhou, Nanchang and Sanya for HK$14.2 billion ($1.83 billion) to Hong Kong Parkview Group, which will in turn issue shares to raise capital for the purchase. After the deal is completed, Hong Kong Parkview will change its name to Cofco Land Holdings Ltd., the Hong Kong-listed company said in a statement on the stock exchange Tuesday.

This deal marks the latest attempt by a Chinese property company to list on the Hong Kong stock exchange through a backdoor listing after regulators in mainland China curbed capital-raising channels for property developers as part of a four-year campaign to cool the country’s frothy housing market. Since early 2012, a number of Chinese property developers, including China Vanke Co. and Greenland Holdings Group, have bought majority stakes in Hong Kong-listed companies to gain access to global capital markets.

After the reverse takeover, the company will be “in a favourable position to obtain financing on competitive terms from banks and other financial institutions,” the statement said.

Cofco Corp. is a state-owned conglomerate with business operations in food processing, agriculture and real estate. It is also known for its Joy City shopping malls in mainland China.

HSBC is the financial adviser to Hong Kong Parkview Group in the acquisition, and the sole sponsor in the new listing application.